VET Needs To Fix ‘wobbly third leg’

Tricycles, tripods and 3-leg bar stools provide stable platforms for optimal functionality. Likewise, the VET sector needs all three of its policy ‘legs’ to be individually fit for purpose and mutually supportive.  Leg 1 is clear economic and social objectives underpinned by stable funding; Leg 2 is efficient, risk-based regulation; and Leg 3 is excellence in training products that link industry priorities with quality skills and educational delivery.  The big challenge in 2024 is to fix the long-term wobbly third Leg.

Leg 1:  Clear economic and social objectives, and stable VET funding/financing

The new 5-year National Skills Agreement (NSA) cast in 2023 is unequivocally better than the earlier 2012 model it replaced.  The publicity has been about Fee-Free TAFE and greater funding, but the far more profound change is the NSA strikes a new balance in accountable cooperative federalism with governments having joint custody of the VET sector. Due credit to a confluence in political will. The prior agreement apportioned Commonwealth funds across States with no explicit State matching requirements. The new NSA provides for greater Commonwealth funds provided States meet NSA terms and invest their own funds (two Commonwealth cap levels of 33% and 45% in a funding mix).

States’ skills plans are to be submitted in 2024, and these coalesced within an integrated national plan. States will drive their own sectors by choice and mix of courses, apprentices/trainees, contracting of training providers and pricing, etc. with ~70% of resources to go to TAFEs. Subject to skills plans, bootup of seven new NSA policy initiatives and deciding the NSA’s optimal scorecard of targets, Leg 1 is settled.

Leg 2:  Quality and efficiency in risk-based VET sector governance and regulation

The positive here is the release (Oct. 2023) of a ‘near final’ draft of the revised Standards for RTOs. The structural changes proposed (e.g. 25 Standards in four quality areas reduced from 38 across five quality areas) provides streamlining. Performance indicators under each Standard provide practical explanation of expected RTO systems and processes. 

The negative is that this is only one third of what RTOs need to know and prepare for, given the new Standards start Jan. 2025.  The two missing parts are a (ministerial) Credential Policy, and Compliance Requirements, both due some time in 2024.  From consultation kick off (Dec. 2020), to end point, this is a four-plus years reform journey.  But elephant-issues ‘in the room’ still need to be dealt with. 

Commendably Ministers in 2023 strengthened fit and proper requirements.  A targeted cull (Jan. 2024) of ~14 allegedly ‘bad actor’ RTOs has occurred, with ~70 others sanctioned.  But overall, there are still very large numbers of RTOs ‘in the room’ (Table 1) with extreme differences e.g. in size (students, courses), resources, governance capability etc.  This all challenges ASQA as the major regulator, who is to be given stronger powers to rid the sector of unscrupulous providers.

Table 1: National Registered Training Organisations 2018-22

Source: NCVER Total VET Students and Courses 2022

Compare TAFE NSW (some $1.9bn revenue and 400,000+ students in 2022) with say small private RTOs where their leaders may carry CEO and all C-Suite roles plus be lead teacher with potentially sub-100 student enrolments per annum.  Of the 389 Schools (Table 1), some 244 (63%) are in Queensland.

The new revised Standards, the basis for best practice in RTO ‘self-governance’, and as needed ASQA’s enforcement (plus Vic. and WA regulators), are agnostic as to RTO size/scope/resources.  Is it rational and can regulation be equitable and efficient having a ‘one size fits all’ regime regardless of RTO? Are there grounds, respectful of quality, for tailored expectations e.g. VET delivered by schools is always going to way different in purpose and level to that of dual sector universities. This elephant is untested. 

And there is restlessness in the herd. TAFEs in their HE Accord submissions seek to go next door to be regulated in the less crowded TEQSA space as better suited to desired self-governance, to be like unis. 

Finally, new Standards for RTOs plus AQSA’s sharper regulator tools are not the only means to drive quality.  Unlike schools (via NAPLAN) and universities (via Departmental HE Statistics), the VET sector has long resisted making transparent selected quality-related performance data at a provider-named level.  Past objections include it would be difficult for users to make meaningful comparisons across widely differing RTOs. Well yes – and this has not stopped NAPLAN being used to rank schools.

So, there is tangible, positive but slow progress on Leg 2 – with more to be done and still more possible.

Leg 3:  Excellence in VET training products [1] linking industry need with quality training

So why is this third leg the wobbly one?  This is a contestable narrative, so feel free to disagree.

In mid-2020, First Ministers signed a Heads of Agreement for Skills Reform committed to “simplifying, rationalising and streamlining national VET qualifications across industry occupation clusters”.  The Australian Industry and Skills Committee (AISC) and its sub-structures were then closed (June 2022), with ~$293 million invested in new Industry Clusters planned for Jan. 2023. The new Government (May 2022) inherited an in-train process, and amended policy establishing tripartite entities, the now 10 Jobs and Skills Councils (JSCs). These were nearly all stood up (by Dec 2023), 18 months after the AISC closed. 

As previously stated, the positive retrospective view of Training Package Qualifications (TP-Qs) emerging from this era (from ~2012-22) is that it led to consistently constructed, nationally recognised and transferable qualifications.  The alternate negative view is of a long running, widely impacting and costly public policy failure.  To be fair, the VET world has not fallen over, national TP-Qs have been sustained and students’ views of VET outcomes and employers views of VET training remain positive.

Extensive public consultation (esp. 2022/23) explored new training product design, e.g. based on skills-based frameworks. This apparently stalled with some arguing retention of TP-Q competencies, e.g. for licensed trade occupations.  In July 2023, an expert tripartite Qualification Reform Design Group was established.  Their report is now due.  All rather slow progress after ~4 years of reform effort.

But this goes back even further. Reports (Nov 2016 and April 2018), using 2015 and 2016 enrolments, showed ~93% of all VET student enrolments were within only 21% of ~1,600 then available TP-Qs, that 20% of TP-Qs were unused and that TP-Qs consolidation down to about 500, in closer accord with the then number of (ANZSCO) classified occupations, was viable.

The system drifted for ~4+ years (numbers of TPs and TP-Qs declined ~20% over 2015-2022).  In 2022, Government analysis (not published) compared content of TP-Q Units of Competence (UoC), finding ~5,000 of total 15,400 UoC had more than 70% overlap of content (and ~ 13% were ‘near’ duplicates).

None of this in any way surprised in-field VET practitioners. The findings were akin to IKEA product design managers all going off independently inventing their own versions of internal fasteners, fixers, joints, rails, clips and screws across their differing product ranges – but IKEA does the exact opposite.

Part of the duplicative drive was in creating industry-specific skills standards (whether used or not), championed by multiple (~70) industry skills committees, and crudely, you can’t get noticed for government subsidy if your industry doesn’t put up its specific desired qualifications.

In the rational quest for national uniformity, most States constitutionally agreed in 2011/12 (Vic. and WA excepted, retaining constrained powers) that VET regulation and development of TP-Qs to be solely run by the Commonwealth.  So, to be very clear, only one Government directly contracted, managed and funded (some hundreds of $ millions since ~2012) the outcomes of national arrangements above. 

Over this period, State Ministers would have received a trail of industry representations complaining about the slow and ineffective TP-Q updates not keeping up with industry need. Folklore grew. They also got many RTO representations about wanting to speed things up by local course-accreditation. 

Hindsight now makes Vic and WA resistance to referral of such powers smart. Despite their constrained jurisdiction they had modest scope to accredit courses for specific local contemporary need, e.g. Adv. Dip. Cybersecurity and Cert III in Emerging Technology, both VRQA-endorsed. 

Finally, RTOs have been and are still largely excluded from direct TP-Q development processes.  They have copped all flow on consequences and extra costs of whatever superseded, upgraded/revised TP-Qs that emerged from final frantic updates/replacements overseen by the AISC as it ran to closure.

Larger providers with comprehensive scope have had to re-boot training and assessment strategies plus teaching content for at least half, if not more, of their courses as well as absorb increased goods/services and equipment costs. They manage enrolments to TP-Q version as ASQA, recognising the sector’s stress, has approved ~174 TP-Q transition extensions (at Jan. 2024) stretching out to 2025.

The unquantified whole-of-nation sector costs (including lost opportunity) are likely to be $multimillion, and well beyond reasonable regulatory costs of doing business as RTOs.

Okay, so this may be a grossly exaggerated, unevidenced picture, only correctable by an independent forensic review. And that’s not going to happen.  But surely there are learnings for those now charged with the future, especially JSCs being custodians of industry interests and cooperating with RTOs, as well as those higher up-stream that manage and contract JSCs, and indeed lessons for governments. 

What of 2024 and beyond?

The future needs to be cooperatively tackled as evident in negotiation of the NSA.  The JSCs have an important and challenging role to play connecting industry with training.

Simplification and flexibility in Training Product Design

One size need not fit all. Some occupations/job tasks must have rigid specification of skill competencies, e.g. licenced trades, while some may be structured on a skills-based framework where interrelated skills can be specified into progressively higher capability levels. The T-shaped graduate concept of deep technical skills and cross cutting enabling skills is conceptually consistent. The JSCs, busy with industry skills plans, will soon need explicit detail of an agreed TP-Q design to get their mission out of 1st gear.

Clarity of roles and expertise demarcation between JSCs vs RTOs

JSCs and RTOs already cooperate well.  The JSC corporate design does not include active RTOs ‘at the table’, being held more at arm’s length. When TP-Q design is finally settled, next steps will be specific qualifications renewal or makeover. Ideally, this will bring all best interests and expertise to the task.

The web sites of JSCs uniformly indicate that they are (contractually) responsible for training product development, variously to include ‘pilots, testing new innovations, assisting training and assessment practices and developing qualifications of high educational standing’. RTOs will firmly hold that best practice contemporary pedagogy is their core business, and bottom line, it’s RTOs that are accountable to ASQA and not JSCs. JSC’s budgets and in-house education expertise may also in time prove limiting.

Avoid duplication of content across qualifications

Given history, this is a critical part of inter-JSC working relations and mandatory periodic independent audit. Some JSCs have an especially critical role, like Future Skills Organisation, in cross JSC cooperation in digital skills, that are pervasive to qualifications across all other JSCs.

Track and cap growth in numbers of nationally approved qualifications

Australia needs fewer dynamically sustained VET qualifications, not more of them. Annual independent audit of uptake and utilisation of qualifications is needed, and yes, some may have specific value in thin markets. The Germans maintain a tighter alignment between specific jobs and training with some 327 recognised training occupations. Australia at present has around 1,200 active VET qualifications. Strategic consolidations of qualifications and perhaps ‘one on, one off’ type rules may be needed.   

Allow multiple approaches to developing national qualifications

If Ministers had their time over, they may wish to have had the rights that Vic and WA retained.  An appraisal of 10 years of Vic/WA experience should be made, with a view to expanding rights to all States. This is not a roll back of referred power, but safeguard against a past ‘single point of failure’.

Actively consider mechanisms to migrate towards provider self-accreditation

TAFEs, positioned at ‘the heart’ of the sector, have explicit ambition for self-accreditation, to be like unis. This appears in conflict with JSC’s (contracted) role in developing VET training products.  TAFEs, in leading Centres of Excellence, will exercise fresh leadership in innovative courses and curriculum.

The HE Accord Final Report is expected to make recommendations regarding better integration of HE and VET, including through new joint qualifications.  So JSC industry networks and expertise will be highly valuable, even if, and when future decisions are made favouring (limited) self-accreditation.

Assess operational and compliance costs ‘downstream’ and avoid excessive ‘churn-burden’

JSCs’ advice will need to fully address operational and regulatory burden on RTOs and not shove unreasonable costs down-stream on providers. Whilst it’s the aspiration to ensure qualifications keep pace with industry need, there are work rate limits and costs within RTO operations invisible to industry.  And every ‘churn’ has RTO regulatory compliance impacts.

Decide oversight tasks and who is the authorised delegated ‘gate keeper’ for Ministers

With the closure of the AISC, some oversight tasks (initially given to AQSA but then withdrawn) are presently vested in the AG Department. An ‘independent arbiter’ or like body is needed as delegate or authority for Minister(s) when new TP-Qs emerge from the JSCs’ work pipeline.

Ensure performance of JSCs and the TP-Q ‘production pipeline’ is fully transparent

Accountable cooperative federalism applies to all, including JSCs and any department managing them.  The NSA makes States majority funders of direct VET training, yet in the past and at present State Ministers have scant insight and no direct influence over TP-Qs that they are indeed ‘obliged-to-buy’.

All Ministers need annual independent reports on the status, development, uptake and utility of all publicly funded VET training products.  Public disclosure will highlight what’s working, what’s not and prompt fixing.  This will limit past unevidenced finger pointing at perceived system failures, and who’s to blame.  This annual TP-Q report should be combined with details of VET provider market structure and performance, in time migrating to a provider-named level (RTOs can now access peer ‘group’ data). 

All of which provides some ideas and means to construct a much needed, way stronger third leg.

Drawing on an extensive career in tertiary education, Dr Craig Fowler runs JCSF Consulting.

[1] A defined term – see Glossary of Revised Standards for RTOs



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